HEHS-95-140: Published: Jun 7, 1995. Publicly Released: Jun 28, 1995.

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Pursuant to a congressional request, GAO reviewed the proposal to merge the Departments of Education and Labor and the Equal Employment Opportunity Commission into the new Department of Education and Employment, focusing on: (1) the proposed funds and staff each new Department of Education and Employment office would have; (2) the likely impact of proposed administrative cost savings on staffing levels in the Department of Education and Employment; and (3) additional opportunities to further consolidate programs within the Department of Education and Employment.

GAO found that: (1) the proposed Department of Education and Employment's budget would be about $71 billion and would support over 25,600 full-time positions and about 1,200 field offices; (2) the new Department would be organized under three undersecretary activities, including workforce preparation and policy, civil rights, and workplace policy; (3) the elimination of some duplicative programs and departmental functions, reduction of operating budgets for certain programs, and consolidation education and job training programs could reduce administrative costs by $1.65 billion; (4) if the reduction in administrative spending occurred in fiscal year 1996, about 4,600 positions would need to be eliminated to achieve 5-year savings from compensation and benefits; (5) if reductions were phased in over a 3-year period, it would allow for a more orderly transition and increase the likelihood of using other alternatives to reduce staffing; (6) 13 other agencies administer about 65 federally funded job training programs which target the same clients and share the same goals, but these programs are not included in the proposal; and (7) an in-depth examination of the proposal and its components is needed before considering such a merger.